BILL REQ. #: H-5025.5
| State of Washington | 61st Legislature | 2010 Regular Session |
READ FIRST TIME 02/09/10.
AN ACT Relating to fuel taxes on exported fuel; amending RCW 82.36.020, 82.36.010, 82.36.026, 82.36.060, 82.36.080, 82.36.230, 82.36.300, 82.38.020, 82.38.030, 82.38.035, 82.38.080, 82.38.090, 82.38.110, 82.38.180, 82.36.045, 82.38.170, and 82.38.290; reenacting and amending RCW 43.84.092; adding new sections to chapter 82.36 RCW; adding new sections to chapter 82.38 RCW; adding a new section to chapter 46.68 RCW; creating a new section; and providing an effective date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 The legislature finds that investing in
projects, such as the Washington state ferry system, which move people
and goods efficiently in the region along with promoting tourism
opportunities, helps to maintain a strong northwest economy. The state
is a regional producer of many products that have positive impacts on
the region's economy, but that also affect the infrastructure of the
region's transportation systems.
Sec. 2 RCW 82.36.020 and 2007 c 515 s 2 are each amended to read
as follows:
(1) There is ((hereby)) levied and imposed upon motor vehicle fuel
licensees, other than crude oil importers or motor vehicle fuel
distributors, a tax at the rate computed in the manner provided in RCW
82.36.025 on each gallon of motor vehicle fuel.
(2) The tax imposed by subsection (1) of this section is imposed
when any of the following occurs:
(a) Motor vehicle fuel is removed in this state from a terminal
((if the motor vehicle fuel is removed at the rack)) unless the removal
is to a licensed supplier or exporter for direct delivery to a
destination outside of the state;
(b) Motor vehicle fuel is removed in this state from a refinery if
either of the following applies:
(i) The removal is by bulk transfer and the refiner or the owner of
the motor vehicle fuel immediately before the removal is not a
licensee; or
(ii) The removal is at the refinery rack or by bulk transfer unless
the removal is to a licensed refiner, supplier, or exporter for direct
delivery to a destination outside of the state;
(c) Motor vehicle fuel enters into this state if either of the
following applies:
(i) The entry is by bulk transfer and the importer is not a
licensee; or
(ii) The entry is not by bulk transfer;
(d) Motor vehicle fuel is sold or removed in this state to an
unlicensed entity unless there was a prior taxable removal, entry, or
sale of the motor vehicle fuel;
(e) Blended motor vehicle fuel is removed or sold in this state by
the blender of the fuel. The number of gallons of blended motor
vehicle fuel subject to the tax is the difference between the total
number of gallons of blended motor vehicle fuel removed or sold and the
number of gallons of previously taxed motor vehicle fuel used to
produce the blended motor vehicle fuel;
(f) Motor vehicle fuel is sold by a licensed motor vehicle fuel
supplier to a motor vehicle fuel distributor, motor vehicle fuel
importer, motor vehicle fuel exporter, motor vehicle fuel blender, or
international fuel tax agreement licensee and the motor vehicle fuel is
not removed from the bulk transfer-terminal system;
(g) Motor vehicle fuel is physically removed from this state.
(3) It is the intent of this chapter to impose a tax only once with
respect to motor vehicle fuel that is entered, removed, or sold.
(4) The proceeds of the motor vehicle fuel excise tax ((shall))
must be distributed as provided in RCW 46.68.090, except for funds
received from exported fuel sold less the credit allowed under section
8 of this act with respect to the fuel. These funds must be
distributed as follows:
(a) Fifty-five percent must be distributed to the Puget Sound
capital construction account, created in RCW 47.60.505, to be used for
the construction and preservation of the Washington state ferry system;
(b) Thirty-five percent must be distributed to the significant
regional transportation projects account created in section 24 of this
act to be used for the construction of the Columbia river crossing;
(c) Five percent must be distributed to the significant regional
transportation projects account created in section 24 of this act to be
used for the construction of the north Spokane corridor; and
(d) Five percent must be distributed to the significant regional
transportation projects account created in section 24 of this act to be
used for the construction of the 520 bridge.
Sec. 3 RCW 82.36.010 and 2007 c 515 s 1 are each amended to read
as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Blended fuel" means a mixture of motor vehicle fuel and
another liquid, other than a de minimis amount of the liquid, that can
be used as a fuel to propel a motor vehicle.
(2) "Bond" means a bond duly executed with a corporate surety
qualified under chapter 48.28 RCW, which bond is payable to the state
of Washington conditioned upon faithful performance of all requirements
of this chapter, including the payment of all taxes, penalties, and
other obligations arising out of this chapter.
(3) "Bulk transfer" means a transfer of motor vehicle fuel by
pipeline or vessel.
(4) "Bulk transfer-terminal system" means the motor vehicle fuel
distribution system consisting of refineries, pipelines, vessels, and
terminals. Motor vehicle fuel in a refinery, pipeline, vessel, or
terminal is in the bulk transfer-terminal system. Motor vehicle fuel
in the fuel tank of an engine, motor vehicle, or in a railcar, trailer,
truck, or other equipment suitable for ground transportation is not in
the bulk transfer-terminal system.
(5) "Crude oil" means a naturally occurring, flammable liquid
consisting of a complex mixture of hydrocarbons of various molecular
weights, and other organic compounds, that is found in geologic
formations beneath the earth's surface.
(6) "Crude oil importer" means a person who imports crude oil into
the state.
(7) "Department" means the department of licensing.
(((6))) (8) "Director" means the director of licensing.
(((7))) (9) "Evasion" or "evade" means to diminish or avoid the
computation, assessment, or payment of authorized taxes or fees
through:
(a) A knowing: False statement; misrepresentation of fact; or
other act of deception; or
(b) An intentional: Omission; failure to file a return or report;
or other act of deception.
(((8))) (10) "Export" means to obtain motor vehicle fuel in this
state for sales or distribution outside the state.
(((9))) (11) "Highway" means every way or place open to the use of
the public, as a matter of right, for the purpose of vehicular travel.
(((10))) (12) "Import" means to bring motor vehicle fuel into this
state by a means of conveyance other than the fuel supply tank of a
motor vehicle.
(((11))) (13) "International fuel tax agreement licensee" means a
motor vehicle fuel user operating qualified motor vehicles in
interstate commerce and licensed by the department under the
international fuel tax agreement.
(((12))) (14) "Licensee" means a person holding a refiner, crude
oil importer, motor vehicle fuel supplier, motor vehicle fuel importer,
motor vehicle fuel exporter, motor vehicle fuel blender, motor vehicle
distributor, or international fuel tax agreement license issued under
this chapter.
(((13))) (15) "Motor vehicle fuel blender" means a person who
produces blended motor fuel outside the bulk transfer-terminal system.
(((14))) (16) "Motor vehicle fuel distributor" means a person who
acquires motor vehicle fuel from a supplier, distributor, or licensee
for subsequent sale and distribution.
(((15))) (17) "Motor vehicle fuel exporter" means a person who
purchases motor vehicle fuel in this state and directly exports the
fuel by a means other than the bulk transfer-terminal system to a
destination outside of the state. If the exporter of record is acting
as an agent, the person for whom the agent is acting is the exporter.
If there is no exporter of record, the owner of the motor fuel at the
time of exportation is the exporter.
(((16))) (18) "Motor vehicle fuel importer" means a person who
imports motor vehicle fuel into the state by a means other than the
bulk transfer-terminal system. If the importer of record is acting as
an agent, the person for whom the agent is acting is the importer. If
there is no importer of record, the owner of the motor vehicle fuel at
the time of importation is the importer.
(((17))) (19) "Motor vehicle fuel supplier" means a person who
holds a federal certificate of registry that is issued under the
internal revenue code and authorizes the person to enter into federal
tax-free transactions on motor vehicle fuel in the bulk transfer-terminal system.
(((18))) (20) "Motor vehicle" means a self-propelled vehicle
designed for operation upon land utilizing motor vehicle fuel as the
means of propulsion.
(((19))) (21) "Motor vehicle fuel" means gasoline and any other
inflammable gas or liquid, by whatsoever name the gasoline, gas, or
liquid may be known or sold, the chief use of which is as fuel for the
propulsion of motor vehicles or motorboats.
(((20))) (22) "Person" means a natural person, fiduciary,
association, or corporation. The term "person" as applied to an
association means and includes the partners or members thereof, and as
applied to corporations, the officers thereof.
(((21))) (23) "Position holder" means a person who holds the
inventory position in motor vehicle fuel, as reflected by the records
of the terminal operator. A person holds the inventory position in
motor vehicle fuel if the person has a contractual agreement with the
terminal for the use of storage facilities and terminating services at
a terminal with respect to motor vehicle fuel. "Position holder"
includes a terminal operator that owns motor vehicle fuel in their
terminal.
(((22))) (24) "Rack" means a mechanism for delivering motor vehicle
fuel from a refinery or terminal into a truck, trailer, railcar, or
other means of nonbulk transfer.
(((23))) (25) "Refiner" means a person who owns, operates, or
otherwise controls a refinery.
(((24))) (26) "Refinery" means an industrial process plant where
crude oil is processed and may be refined into, but not limited to,
motor fuel (gasoline/petrol), diesel fuel, asphalt base, kerosene,
diesel oil, liquefied petroleum gases (LPG), jet aircraft fuel, heating
fuel oils, chemicals, lubricating oils, and petroleum coke.
(27) "Removal" means a physical transfer of motor vehicle fuel
other than by evaporation, loss, or destruction.
(((25))) (28) "Terminal" means a motor vehicle fuel storage and
distribution facility that has been assigned a terminal control number
by the internal revenue service, is supplied by pipeline or vessel, and
from which reportable motor vehicle fuel is removed at a rack.
(((26))) (29) "Terminal operator" means a person who owns,
operates, or otherwise controls a terminal.
(((27))) (30) "Two-party exchange" or "buy-sell agreement" means a
transaction in which taxable motor vehicle fuel is transferred from one
licensed supplier to another licensed supplier under an exchange or
buy-sell agreement whereby the supplier that is the position holder
agrees to deliver taxable motor vehicle fuel to the other supplier or
the other supplier's customer at the rack of the terminal at which the
delivering supplier is the position holder.
(31) "United States" means the federal constitutional republic
comprising the fifty states and a federal district known as the United
States of America.
Sec. 4 RCW 82.36.026 and 2007 c 515 s 4 are each amended to read
as follows:
(1) A licensed supplier ((shall be)) is liable for and must pay tax
to the department as provided in RCW 82.36.020. On a two-party
exchange, or buy-sell agreement between two licensed suppliers, the
receiving exchange partner or buyer ((shall be)) is liable for and must
pay the tax.
(2) A refiner ((shall be)) is liable for and must pay tax to the
department on motor vehicle fuel removed from a refinery as provided in
RCW 82.36.020(2)(b).
(3) A licensed importer ((shall be)) is liable for and must pay tax
to the department on motor vehicle fuel imported into this state as
provided in RCW 82.36.020(2)(c).
(4) A licensed blender ((shall be)) is liable for and must pay tax
to the department on the removal or sale of blended motor vehicle fuel
as provided in RCW 82.36.020(2)(e).
(5) A licensed refiner, supplier, or exporter is liable for and
must pay tax to the department on motor vehicle fuel for export as
provided in RCW 82.36.020(2)(g). The net amount of tax due must be
calculated to consider the credit in section 8 of this act.
(6) Nothing in this chapter ((shall)) prohibits the licensee liable
for payment of the tax under this chapter from including as a part of
the selling price an amount equal to the tax.
Sec. 5 RCW 82.36.060 and 2007 c 515 s 10 are each amended to read
as follows:
(1) An application for a license issued under this chapter
((shall)) must be made to the department on forms to be furnished by
the department and ((shall)) must contain such information as the
department deems necessary.
(2) Every application for a license must contain the following
information to the extent it applies to the applicant:
(a) Proof as the department may require concerning the applicant's
identity, including but not limited to his or her fingerprints or those
of the officers of a corporation making the application;
(b) The applicant's form and place of organization including proof
that the individual, partnership, or corporation is licensed to do
business in this state;
(c) The qualification and business history of the applicant and any
partner, officer, or director;
(d) The applicant's financial condition or history including a bank
reference and whether the applicant or any partner, officer, or
director has ever been adjudged bankrupt or has an unsatisfied judgment
in a federal or state court;
(e) Whether the applicant has been adjudged guilty of a crime that
directly relates to the business for which the license is sought and
the time elapsed since the conviction is less than ten years, or has
suffered a judgment within the preceding five years in a civil action
involving fraud, misrepresentation, or conversion and in the case of a
corporation or partnership, all directors, officers, or partners.
(3) An applicant for a license as a motor vehicle fuel importer
must list on the application each state, province, or country from
which the applicant intends to import motor vehicle fuel and, if
required by the state, province, or country listed, must be licensed or
registered for motor vehicle fuel tax purposes in that state, province,
or country.
(4) An applicant for a license as a motor vehicle fuel exporter
must list on the application each state, province, or country to which
the exporter intends to export motor vehicle fuel received in this
state by means of a transfer outside of the bulk transfer-terminal
system and, if required by the state, province, or country listed, must
be licensed or registered for motor vehicle fuel tax purposes in that
state, province, or country.
(5) An applicant for a license as a motor vehicle fuel supplier
must have a federal certificate of registry that is issued under the
internal revenue code and authorizes the applicant to enter into
federal tax-free transactions on motor vehicle fuel in the terminal
transfer system.
(6) After receipt of an application for a license, the director may
conduct an investigation to determine whether the facts set forth are
true. The director ((shall)) must require a fingerprint record check
of the applicant through the Washington state patrol criminal
identification system and the federal bureau of investigation before
issuance of a license. The results of the background investigation
including criminal history information may be released to authorized
department personnel as the director deems necessary. The department
((shall)) must charge a license holder or license applicant a fee of
fifty dollars for each background investigation conducted.
An applicant who makes a false statement of a material fact on the
application may be prosecuted for false swearing as defined by RCW
9A.72.040.
(7)(a) Except as provided by subsection (8) of this section, before
granting any license issued under this chapter, the department
((shall)) must require applicant to file with the department, in
((such)) the form ((as shall be)) prescribed by the department, a
corporate surety bond duly executed by the applicant as principal,
payable to the state and conditioned for faithful performance of all
the requirements of this chapter, including the payment of all taxes,
penalties, and other obligations arising out of this chapter. The
total amount of the bond or bonds ((shall)) must be fixed by the
department and may be increased or reduced by the department at any
time subject to the limitations herein provided. In fixing the total
amount of the bond or bonds, the department ((shall)) must require a
bond or bonds equivalent in total amount to twice the estimated monthly
excise tax determined in such manner as the department may deem proper.
If at any time the estimated excise tax to become due during the
succeeding month amounts to more than fifty percent of the established
bond, the department ((shall)) must require additional bonds or
securities to maintain the marginal ratio herein specified or ((shall))
must demand excise tax payments to be made weekly or semimonthly to
meet the requirements hereof.
(b) The total amount of the bond or bonds required of any licensee
((shall)) may never be less than five thousand dollars nor more than
one hundred thousand dollars.
(c) No recoveries on any bond or the execution of any new bond
((shall)) invalidates any bond and no revocation of any license
((shall)) effects the validity of any bond but the total recoveries
under any one bond ((shall)) may not exceed the amount of the bond.
(d) In lieu of any such bond or bonds in total amount as herein
fixed, a licensee may deposit with the state treasurer, under such
terms and conditions as the department may prescribe, a like amount of
lawful money of the United States or bonds or other obligations of the
United States, the state, or any county of the state, of an actual
market value not less than the amount so fixed by the department.
(e) Any surety on a bond furnished by a licensee as provided herein
((shall)) must be released and discharged from any and all liability to
the state accruing on such bond after the expiration of thirty days
from the date upon which such surety has lodged with the department a
written request to be released and discharged, but this provision
((shall)) does not operate to relieve, release, or discharge the surety
from any liability already accrued or which ((shall)) will accrue
before the expiration of the thirty day period. The department
((shall)) must promptly, upon receiving any such request, notify the
licensee who furnished the bond; and unless the licensee, on or before
the expiration of the thirty day period, files a new bond, or makes a
deposit in accordance with the requirements of this section, the
department ((shall forthwith)) must cancel the license. Whenever a new
bond is furnished by a licensee, the department ((shall)) must cancel
the old bond as soon as the department and the attorney general are
satisfied that all liability under the old bond has been fully
discharged.
(f) The department may require a licensee to give a new or
additional surety bond or to deposit additional securities of the
character specified in this section if, in its opinion, the security of
the surety bond theretofore filed by ((such)) the licensee, or the
market value of the properties deposited as security by the licensee,
((shall)) become impaired or inadequate; and upon the failure of the
licensee to give ((such)) the new or additional surety bond or to
deposit additional securities within thirty days after being requested
so to do by the department, the department ((shall forthwith)) must
cancel his or her license.
(8) The department may waive the requirements of subsection (7) of
this section for licensed refiners, crude oil importers, or
distributors if, upon determination by the department, the licensed
refiner, crude oil importer, or distributor has sufficient resources,
assets, other financial instruments, or other means, to adequately make
payments on the estimated monthly motor vehicle fuel tax payments,
penalties, and interest arising out of this chapter. The department
((shall)) must adopt rules to administer this subsection.
(9) An application for an international fuel tax agreement license
must be made to the department. The application must be filed upon a
form prescribed by the department and contain such information as the
department may require. The department ((shall)) must charge a fee of
ten dollars per set of international fuel tax agreement decals issued
to each applicant or licensee. The department ((shall)) must transmit
the fee to the state treasurer for deposit in the motor vehicle fund.
Sec. 6 RCW 82.36.080 and 2007 c 515 s 11 are each amended to read
as follows:
(1) It ((shall be)) is unlawful for any person to engage in
business in this state as any of the following unless the person is the
holder of an uncanceled license issued by the department authorizing
the person to engage in that business:
(a) Motor vehicle fuel supplier;
(b) Motor vehicle fuel distributor;
(c) Motor vehicle fuel exporter;
(d) Motor vehicle fuel importer;
(e) Motor vehicle fuel blender; ((or))
(f) International fuel tax agreement licensee;
(g) Refiner; or
(h) Crude oil importer.
(2) A person engaged in more than one activity for which a license
is required must have a separate license classification for each
activity, but a motor vehicle fuel supplier is not required to obtain
a separate license classification for any other activity for which a
license is required.
(3) If any person acts as a licensee without first securing the
license required herein the excise tax ((shall be)) is immediately due
and payable on account of all motor vehicle fuel distributed or used by
the person. The director ((shall)) must proceed ((forthwith)) to
determine from the best available sources, the amount of the tax, and
((the director shall)) must immediately assess the tax in the amount
found due, together with a penalty of one hundred percent of the tax,
and ((shall)) must make a certificate of such assessment and penalty.
In any suit or proceeding to collect the tax or penalty, or both, such
certificate ((shall be)) is prima facie evidence that the person
therein named is indebted to the state in the amount of the tax and
penalty therein stated. Any tax or penalty so assessed may be
collected in the manner prescribed in this chapter with reference to
delinquency in payment of the tax or by an action at law, which the
attorney general ((shall)) must commence and prosecute to final
determination at the request of the director. The foregoing remedies
of the state ((shall be)) are cumulative and no action taken pursuant
to this section ((shall)) relieves any person from the penal provisions
of this chapter.
Sec. 7 RCW 82.36.230 and 1998 c 176 s 34 are each amended to read
as follows:
((The provisions of this chapter requiring the payment of taxes do
not apply to motor vehicle fuel imported into the state in interstate
or foreign commerce and intended to be sold while in interstate or
foreign commerce, nor to motor vehicle fuel exported from this state by
a licensee nor to any motor vehicle fuel sold by a licensee to the
armed forces of the United States or to the national guard for use
exclusively in ships or for export from this state. The)) (1) A
licensee ((shall)) receiving an exemption under section 9 of this act
or claiming the credit under section 8 of this act must report such
imports, exports ((and)), credits or sales to the department at such
times, on such forms, and in such detail as the department may require,
otherwise the exemption granted in ((this)) section 9 of this act or
the credit allowed under section 8 of this act is null and void, and
all fuel ((shall)) must be considered distributed in this state fully
subject to the provisions of this chapter. Each invoice covering
exempt sales ((shall)) must have the statement "Ex Washington Motor
Vehicle Fuel Tax" clearly marked thereon.
(2) To claim any exemption from taxes under ((this)) section 9 of
this act or a credit under section 8 of this act on account of sales by
a licensee of motor vehicle fuel for export, the purchaser ((shall))
must obtain from the selling licensee, and such selling licensee must
furnish to the purchaser, an invoice giving such details of the sale
for export as the department may require, copies of which ((shall))
must be furnished to the department and the entity of the state or
foreign jurisdiction of destination which is charged by the laws of
that state or foreign jurisdiction with the control or monitoring, or
both, of the sales or movement of motor vehicle fuel in that state or
foreign jurisdiction. For the purposes of ((this)) section 9 of this
act, motor vehicle fuel distributed to a federally recognized Indian
tribal reservation located within the state of Washington is not
considered exported outside this state.
(3) To claim any refund of taxes previously paid on account of
sales of motor vehicle fuel to the armed forces of the United States or
to the national guard, the licensee ((shall be)) is required to execute
an exemption certificate in ((such)) the form ((as shall be)) furnished
by the department, containing a certified statement by an authorized
officer of the armed forces having actual knowledge of the purpose for
which the exemption is claimed. The provisions of ((this)) section 9
of this act exempting motor vehicle fuel sold to the armed forces of
the United States or to the national guard from the tax imposed
((hereunder)) under this chapter do not apply to any motor vehicle fuel
sold to contractors purchasing such fuel either for their own account
or as the agents of the United States or the national guard for use in
the performance of contracts with the armed forces of the United States
or the national guard.
(4) The department may at any time require of any licensee any
information the department deems necessary to determine the validity of
the ((claimed)) exemption taken under section 9 of this act or the
credit taken under section 8 of this act, and failure to supply such
data will constitute a waiver of all right to the exemption or credit
claimed. The department is hereby empowered with full authority to
promulgate rules and regulations and to prescribe forms to be used by
licensees in reporting to the department so as to prevent evasion of
the tax imposed by this chapter.
(5) Upon request from the officials to whom are entrusted the
enforcement of the motor vehicle fuel tax law of any other state, the
District of Columbia, the United States, its territories and
possessions, the provinces, or the Dominion of Canada, the department
may forward to such officials any information which the department may
have relative to the import or export of any motor vehicle fuel by any
licensee((: PROVIDED, That)), if such governmental unit is authorized
to furnish like information to this state.
NEW SECTION. Sec. 8 A new section is added to chapter 82.36 RCW
to read as follows:
(1) In computing the tax imposed under this chapter, a credit is
allowed for motor vehicle fuel exported from the state. Except as
provided in subsection (2) of this section, the credit is equal to the
number of gallons of fuel exported multiplied by the total rate of tax
imposed under this chapter, less 2.5 cents per gallon.
(2) If the total rate of motor vehicle fuel tax imposed by the
importing state exceeds the total rate of tax imposed under this
chapter less 2.5 cents per gallon, the credit is equal to the number of
gallons of fuel exported multiplied by the total rate of tax imposed by
the importing state.
(3) The amount of credit earned under this section may not exceed
the tax otherwise due under this chapter with respect to the fuel
exported.
(4) This credit under this section is subject to the provisions of
RCW 82.36.230.
NEW SECTION. Sec. 9 A new section is added to chapter 82.36 RCW
to read as follows:
(1) The provisions of this chapter requiring the payment of taxes
do not apply to motor vehicle fuel imported into the state in
interstate or foreign commerce and intended to be sold while in
interstate or foreign commerce, nor to motor vehicle fuel exported from
this state to a destination outside the United States, nor to any motor
vehicle fuel sold by a licensee to the armed forces of the United
States or to the national guard for use exclusively in ships or for
export from this state.
(2) The exemption under this section is subject to the provisions
of RCW 82.36.230.
NEW SECTION. Sec. 10 A new section is added to chapter 82.36 RCW
to read as follows:
In computing the tax imposed under this chapter, a credit is
allowed against tax due on the entry, removal, or sale of fuel and is
equal to tax imposed under this chapter that has already been paid with
respect to the same fuel. The department may require the taxpayer to
provide proof of prior tax payments with respect to the fuel. The
credit may be claimed as provided in RCW 82.36.310.
Sec. 11 RCW 82.36.300 and 1998 c 176 s 37 are each amended to
read as follows:
Every person who ((shall)) exports any motor vehicle fuel for use
outside of this state and who has paid the motor vehicle fuel excise
tax upon such motor vehicle fuel ((shall be)) imposed in RCW 82.36.020
is entitled to and ((shall)) must receive a refund of the amount of the
motor vehicle fuel excise tax paid on each gallon of motor vehicle fuel
so exported less the credit taken in section 8 of this act. For the
purposes of this section, motor vehicle fuel distributed to a federally
recognized Indian tribal reservation located within the state of
Washington is not considered exported outside this state.
Sec. 12 RCW 82.38.020 and 2002 c 183 s 1 are each amended to read
as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Blended special fuel" means a mixture of undyed diesel fuel
and another liquid, other than a de minimis amount of the liquid, that
can be used as a fuel to propel a motor vehicle.
(2) "Blender" means a person who produces blended special fuel
outside the bulk transfer-terminal system.
(3) "Bond" means a bond duly executed with a corporate surety
qualified under chapter 48.28 RCW, which bond is payable to the state
of Washington conditioned upon faithful performance of all requirements
of this chapter, including the payment of all taxes, penalties, and
other obligations arising out of this chapter.
(4) "Bulk transfer-terminal system" means the special fuel
distribution system consisting of refineries, pipelines, vessels, and
terminals. Special fuel in a refinery, pipeline, vessel, or terminal
is in the bulk transfer-terminal system. Special fuel in the fuel tank
of an engine, motor vehicle, or in a railcar, trailer, truck, or other
equipment suitable for ground transportation is not in the bulk
transfer-terminal system.
(5) "Bulk transfer" means a transfer of special fuel by pipeline or
vessel.
(6) "Bulk storage" means the placing of special fuel into a
receptacle other than the fuel supply tank of a motor vehicle.
(7) "Crude oil" means a naturally occurring, flammable liquid
consisting of a complex mixture of hydrocarbons of various molecular
weights, and other organic compounds, that is found in geologic
formations beneath the earth's surface.
(8) "Crude oil importer" means a person who imports crude oil into
the state.
(9) "Department" means the department of licensing.
(((8))) (10) "Dyed special fuel user" means a person authorized by
the internal revenue code to operate a motor vehicle on the highway
using dyed special fuel, in which the use is not exempt from the
special fuel tax.
(((9))) (11) "Evasion" or "evade" means to diminish or avoid the
computation, assessment, or payment of authorized taxes or fees
through:
(a) A knowing: False statement; omission; misrepresentation of
fact; or other act of deception;
(b) An intentional: Failure to file a return or report; or other
act of deception; or
(c) The unlawful use of dyed special fuel.
(((10))) (12) "Export" means to obtain special fuel in this state
for sales or distribution outside the state.
(((11))) (13) "Highway" means every way or place open to the use of
the public, as a matter of right, for the purpose of vehicular travel.
(((12))) (14) "Import" means to bring special fuel into this state
by a means of conveyance other than the fuel supply tank of a motor
vehicle.
(((13))) (15) "International fuel tax agreement authorization
licensee" means an international fuel tax agreement licensee that is
authorized to purchase bulk tax-deferred special fuel when at least
twenty percent of their fuel is consumed outside the state.
(16) "International fuel tax agreement licensee" means a special
fuel user operating qualified motor vehicles in interstate commerce and
licensed by the department under the international fuel tax agreement.
(((14))) (17) "Lessor" means a person: (a) Whose principal
business is the bona fide leasing or renting of motor vehicles without
drivers for compensation to the general public; and (b) who maintains
established places of business and whose lease or rental contracts
require the motor vehicles to be returned to the established places of
business.
(((15))) (18) "Licensee" means a person holding a refiner, crude
oil importer, special fuel supplier, special fuel importer, special
fuel exporter, special fuel blender, special fuel distributor, dyed
special fuel user, international fuel tax agreement authorization, or
international fuel tax agreement license issued under this chapter.
(((16))) (19) "Motor vehicle" means a self-propelled vehicle
designed for operation upon land utilizing special fuel as the means of
propulsion.
(((17))) (20) "Natural gas" means naturally occurring mixtures of
hydrocarbon gases and vapors consisting principally of methane, whether
in gaseous or liquid form.
(((18))) (21) "Person" means a natural person, fiduciary,
association, or corporation. The term "person" as applied to an
association means and includes the partners or members thereof, and as
applied to corporations, the officers thereof.
(((19))) (22) "Position holder" means a person who holds the
inventory position in special fuel, as reflected by the records of the
terminal operator. A person holds the inventory position in special
fuel if the person has a contractual agreement with the terminal for
the use of storage facilities and terminating services at a terminal
with respect to special fuel. "Position holder" includes a terminal
operator that owns special fuel in their terminal.
(((20))) (23) "Rack" means a mechanism for delivering special fuel
from a refinery or terminal into a truck, trailer, railcar, or other
means of nonbulk transfer.
(((21))) (24) "Refiner" means a person who owns, operates, or
otherwise controls a refinery.
(((22))) (25) "Refinery" means an industrial process plant where
crude oil is processed and may be refined into, but not limited to,
motor fuel (gasoline/petrol), diesel fuel, asphalt base, kerosene,
diesel oil, liquefied petroleum gases (LPG), jet aircraft fuel, heating
fuel oils, chemicals, lubricating oils, and petroleum coke.
(26) "Removal" means a physical transfer of special fuel other than
by evaporation, loss, or destruction.
(((23))) (27) "Special fuel" means and includes all combustible
gases and liquids suitable for the generation of power for propulsion
of motor vehicles, except that it does not include motor vehicle fuel
as defined in chapter 82.36 RCW, nor does it include dyed special fuel
as defined by federal regulations, unless the use is in violation of
this chapter. If a person holds for sale, sells, purchases, or uses
any dyed special fuel in violation of this chapter, all dyed special
fuel held for sale, sold, purchased, stored, or used by that person is
considered special fuel, and the person is subject to all presumptions,
reporting, and recordkeeping requirements and other obligations which
apply to special fuel, along with payment of any applicable taxes,
penalties, or interest for illegal use.
(((24))) (28) "Special fuel distributor" means a person who
acquires special fuel from a supplier, distributor, or licensee for
subsequent sale and distribution.
(((25))) (29) "Special fuel exporter" means a person who purchases
special fuel in this state and directly exports the fuel by a means
other than the bulk transfer-terminal system to a destination outside
of the state.
(((26))) (30) "Special fuel importer" means a person who imports
special fuel into the state by a means other than the bulk transfer-terminal system. If the importer of record is acting as an agent, the
person for whom the agent is acting is the importer. If there is no
importer of record, the owner of the special fuel at the time of
importation is the importer.
(((27))) (31) "Special fuel supplier" means a person who holds a
federal certificate issued under the internal revenue code and
authorizes the person to tax-free transactions on special fuel in the
bulk transfer-terminal system.
(((28))) (32) "Special fuel user" means a person engaged in uses of
special fuel that are not specifically exempted from the special fuel
tax imposed under this chapter.
(((29))) (33) "Terminal" means a special fuel storage and
distribution facility that has been assigned a terminal control number
by the internal revenue service, is supplied by pipeline or vessel, and
from which reportable special fuel is removed at a rack.
(((30))) (34) "Terminal operator" means a person who owns,
operates, or otherwise controls a terminal.
(((31))) (35) "Two-party exchange" or "buy-sell agreement" means a
transaction in which taxable special fuel is transferred from one
licensed supplier to another licensed supplier under an exchange or
buy-sell agreement whereby the supplier that is the position holder
agrees to deliver taxable special fuel to the other supplier or the
other supplier's customer at the rack of the terminal at which the
delivering supplier is the position holder.
(36) "United States" means the federal constitutional republic
comprising the fifty states and a federal district known as the United
States of America.
Sec. 13 RCW 82.38.030 and 2007 c 515 s 21 are each amended to
read as follows:
(1) There is ((hereby)) levied and imposed upon special fuel
licensees, other than crude oil importers or special fuel distributors,
a tax at the rate of twenty-three cents per gallon of special fuel, or
each one hundred cubic feet of compressed natural gas, measured at
standard pressure and temperature.
(2) Beginning July 1, 2003, an additional and cumulative tax rate
of five cents per gallon of special fuel, or each one hundred cubic
feet of compressed natural gas, measured at standard pressure and
temperature ((shall be)) is imposed on special fuel licensees, other
than special fuel distributors. This subsection (2) expires when the
bonds issued for transportation 2003 projects are retired.
(3) Beginning July 1, 2005, an additional and cumulative tax rate
of three cents per gallon of special fuel, or each one hundred cubic
feet of compressed natural gas, measured at standard pressure and
temperature ((shall be)) is imposed on special fuel licensees, other
than special fuel distributors.
(4) Beginning July 1, 2006, an additional and cumulative tax rate
of three cents per gallon of special fuel, or each one hundred cubic
feet of compressed natural gas, measured at standard pressure and
temperature ((shall be)) is imposed on special fuel licensees, other
than special fuel distributors.
(5) Beginning July 1, 2007, an additional and cumulative tax rate
of two cents per gallon of special fuel, or each one hundred cubic feet
of compressed natural gas, measured at standard pressure and
temperature ((shall be)) is imposed on special fuel licensees, other
than special fuel distributors.
(6) Beginning July 1, 2008, an additional and cumulative tax rate
of one and one-half cents per gallon of special fuel, or each one
hundred cubic feet of compressed natural gas, measured at standard
pressure and temperature ((shall be)) is imposed on special fuel
licensees, other than special fuel distributors.
(7) Taxes are imposed when:
(a) Special fuel is removed in this state from a terminal if the
special fuel is removed at the rack unless the removal is to a licensed
supplier or exporter for direct delivery to a destination outside of
the state, or ((the removal is by)) to a special fuel supplier for
direct delivery to an international fuel tax agreement licensee under
RCW 82.38.320;
(b) Special fuel is removed in this state from a refinery if either
of the following applies:
(i) The removal is by bulk transfer and the refiner or the owner of
the special fuel immediately before the removal is not a licensee; or
(ii) The removal is at the refinery rack unless the removal is to
a licensed supplier or exporter for direct delivery to a destination
outside of the state, or unless the removal is to a special fuel
supplier for direct delivery to an international fuel tax agreement
licensee under RCW 82.38.320;
(c) Special fuel enters into this state for sale, consumption, use,
or storage, unless the fuel enters this state for direct delivery to an
international fuel tax agreement licensee under RCW 82.38.320, if
either of the following applies:
(i) The entry is by bulk transfer and the importer is not a
licensee; or
(ii) The entry is not by bulk transfer;
(d) Special fuel is sold or removed in this state to an unlicensed
entity unless there was a prior taxable removal, entry, or sale of the
special fuel;
(e) Blended special fuel is removed or sold in this state by the
blender of the fuel. The number of gallons of blended special fuel
subject to tax is the difference between the total number of gallons of
blended special fuel removed or sold and the number of gallons of
previously taxed special fuel used to produce the blended special fuel;
(f) Dyed special fuel is used on a highway, as authorized by the
internal revenue code, unless the use is exempt from the special fuel
tax;
(g) Dyed special fuel is held for sale, sold, used, or is intended
to be used in violation of this chapter;
(h) Special fuel purchased by an international fuel tax agreement
licensee under RCW 82.38.320 is used on a highway; ((and))
(i) Special fuel is sold by a licensed special fuel supplier to a
special fuel distributor, special fuel importer, special fuel exporter,
or special fuel blender and the special fuel is not removed from the
bulk transfer-terminal system; and
(j) Special fuel is physically removed from this state.
(8) A tax under this chapter may only be imposed once with respect
to special fuel that is entered, removed, or sold.
Sec. 14 RCW 82.38.035 and 2007 c 515 s 23 are each amended to
read as follows:
(1) A licensed supplier ((shall be)) is liable for and must pay tax
on special fuel to the department as provided in RCW 82.38.030(7)(a).
On a two-party exchange, or buy-sell agreement between two licensed
suppliers, the receiving exchange partner or buyer ((shall be)) is
liable for and must pay the tax.
(2) A refiner ((shall be)) is liable for and must pay tax to the
department on special fuel removed from a refinery as provided in RCW
82.38.030(7)(b).
(3) A licensed importer ((shall be)) is liable for and must pay tax
to the department on special fuel imported into this state as provided
in RCW 82.38.030(7)(c).
(4) A licensed blender ((shall be)) is liable for and must pay tax
to the department on the removal or sale of blended special fuel as
provided in RCW 82.38.030(7)(e).
(5) A licensed dyed special fuel user ((shall be)) is liable for
and must pay tax to the department on the use of dyed special fuel as
provided in RCW 82.38.030(7)(f).
(6) A licensed refiner, supplier, or exporter is liable for and
must pay tax to the department on motor vehicle fuel for export as
provided in RCW 82.38.030(7)(j). The net amount of tax due must be
calculated to consider the credit in section 16 of this act.
(7) Nothing in this chapter prohibits the licensee liable for
payment of the tax under this chapter from including as a part of the
selling price an amount equal to such tax.
Sec. 15 RCW 82.38.080 and 2009 c 352 s 1 are each amended to read
as follows:
(1) There is exempted from the tax imposed by this chapter, the use
of fuel for:
(a) Street and highway construction and maintenance purposes in
motor vehicles owned and operated by the state of Washington, or any
county or municipality;
(b) Publicly owned firefighting equipment;
(c) Special mobile equipment as defined in RCW 46.04.552;
(d) Power pumping units or other power take-off equipment of any
motor vehicle which is accurately measured by metering devices that
have been specifically approved by the department or which is
established by any of the following formulae:
(i) Pumping propane, or fuel or heating oils or milk picked up from
a farm or dairy farm storage tank by a power take-off unit on a
delivery truck, at a rate determined by the department((: PROVIDED,
That)). However, a claimant when presenting his or her claim to the
department in accordance with this chapter, ((shall)) must provide ((to
the claim,)) invoices of propane, or fuel or heating oil delivered, or
such other appropriate information as may be required by the department
to substantiate his or her claim;
(ii) Operating a power take-off unit on a cement mixer truck or a
load compactor on a garbage truck at the rate of twenty-five percent of
the total gallons of fuel used in such a truck; or
(iii) The department is authorized to establish by rule additional
formulae for determining fuel usage when operating other types of
equipment by means of power take-off units when direct measurement of
the fuel used is not feasible. The department is also authorized to
adopt rules regarding the usage of on board computers for the
production of records required by this chapter;
(e) Motor vehicles owned and operated by the United States
government;
(f) Heating purposes;
(g) Moving a motor vehicle on a public highway between two pieces
of private property when said moving is incidental to the primary use
of the motor vehicle;
(h) Transportation services for persons with special transportation
needs by a private, nonprofit transportation provider regulated under
chapter 81.66 RCW;
(i) Vehicle refrigeration units, mixing units, or other equipment
powered by separate motors from separate fuel tanks;
(j) The operation of a motor vehicle as a part of or incidental to
logging operations upon a highway under federal jurisdiction within the
boundaries of a federal area if the federal government requires a fee
for the privilege of operating the motor vehicle upon the highway, the
proceeds of which are reserved for constructing or maintaining roads in
the federal area, or requires maintenance or construction work to be
performed on the highway for the privilege of operating the motor
vehicle on the highway; and
(k) Waste vegetable oil as defined under RCW 82.08.0205 if the oil
is used to manufacture biodiesel.
(2) There is exempted from the tax imposed by this chapter the
removal or entry of special fuel under the following circumstances and
conditions:
(a) If it is the removal from a terminal or refinery of, or the
entry or sale of, a special fuel if all of the following apply:
(i) The person otherwise liable for the tax is a licensee other
than a dyed special fuel user or international fuel tax agreement
licensee;
(ii) For a removal from a terminal, the terminal is a licensed
terminal; and
(iii) The special fuel satisfies the dyeing and marking
requirements of this chapter;
(b) If it is an entry or removal from a terminal or refinery of
taxable special fuel transferred to a refinery or terminal within the
state and the persons involved, including the terminal operator, are
licensed; and
(c)(i) If it is a special fuel that, under contract of sale, is
shipped to a point outside ((this state)) the United States by a
supplier by means of any of the following:
(A) Facilities operated by the supplier;
(B) Delivery by the supplier to a carrier, customs broker, or
forwarding agent, whether hired by the purchaser or not, for shipment
to the ((out-of-state)) out-of-country point;
(C) Delivery by the supplier to a vessel clearing from port of this
state for a port outside ((this state)) the United States and actually
exported from this state in the vessel.
(ii) For purposes of this subsection (2)(c):
(A) "Carrier" means a person or firm engaged in the business of
transporting for compensation property owned by other persons, and
includes both common and contract carriers; and
(B) "Forwarding agent" means a person or firm engaged in the
business of preparing property for shipment or arranging for its
shipment.
(3)(a) Notwithstanding any provision of law to the contrary, every
privately owned urban passenger transportation system and carriers as
defined by chapters 81.68 and 81.70 RCW ((shall be)) is exempt from the
provisions of this chapter requiring the payment of special fuel taxes.
For the purposes of this section "privately owned urban passenger
transportation system" means every privately owned transportation
system having as its principal source of revenue the income from
transporting persons for compensation by means of motor vehicles or
trackless trolleys, each having a seating capacity for over fifteen
persons over prescribed routes in such a manner that the routes of such
motor vehicles or trackless trolleys, either alone or in conjunction
with routes of other such motor vehicles or trackless trolleys subject
to routing by the same transportation system, ((shall)) may not extend
for a distance exceeding twenty-five road miles beyond the corporate
limits of the county in which the original starting points of such
motor vehicles are located((: PROVIDED, That)). However, no refunds
or credits ((shall)) may be granted on special fuel used by any
privately owned urban transportation vehicle, or vehicle operated
pursuant to chapters 81.68 and 81.70 RCW, on any trip where any portion
of the trip is more than twenty-five road miles beyond the corporate
limits of the county in which the trip originated.
(b) Every publicly owned and operated urban passenger
transportation system is exempt from the provisions of this chapter
that require the payment of special fuel taxes. For the purposes of
this subsection, "publicly owned and operated urban passenger
transportation systems" include public transportation benefit areas
under chapter 36.57A RCW, metropolitan municipal corporations under
chapter 36.56 RCW, city-owned transit systems under chapter 35.58 RCW,
county public transportation authorities under chapter 36.57 RCW,
unincorporated transportation benefit areas under chapter 36.57 RCW,
and regional transit authorities under chapter 81.112 RCW.
NEW SECTION. Sec. 16 A new section is added to chapter 82.38 RCW
to read as follows:
(1) In computing the tax imposed under this chapter, a credit is
allowed for special fuel or compressed natural gas exported from the
state. Except as provided in subsection (2) of this section, for
special fuel, the credit is equal to the number of gallons of fuel
exported multiplied by the total rate of tax imposed under this
chapter, less 2.5 cents per gallon.
(2) If the total rate of special fuel tax imposed by the importing
state exceeds the total rate of tax imposed under this chapter less 2.5
cents per gallon for special fuel or 2.5 cents per hundred cubic feet
of compressed natural gas, the credit is equal to the number of gallons
of special fuel or number of hundred cubic feet of compressed natural
gas exported multiplied by the total rate of tax imposed by the
importing state.
(3) The amount of credit earned under this section may not exceed
the tax otherwise due under this chapter with respect to the special
fuel or compressed natural gas exported.
(4) This credit under this section is subject to the provisions of
section 17 of this act.
NEW SECTION. Sec. 17 A new section is added to chapter 82.38 RCW
to read as follows:
To claim a credit against tax under section 16 of this act relating
to a sale by a licensee of special fuel for export, the purchaser must
obtain from the selling licensee, and such selling licensee must
furnish to the purchaser, an invoice giving such details of the sale
for export as the department may require, copies of which must be
furnished to the department and the entity of the state of destination
which is charged by the laws of that state with the control or
monitoring, or both, of the sales or movement of special fuel in that
state.
NEW SECTION. Sec. 18 A new section is added to chapter 82.38 RCW
to read as follows:
In computing the tax imposed under this chapter, a credit is
allowed against tax due on the entry, removal, or sale of fuel and is
equal to tax imposed under this chapter that has already been paid with
respect to the same fuel. The department may require the taxpayer to
provide proof of prior tax payments with respect to the fuel. The
credit may be claimed as provided in RCW 82.38.190.
Sec. 19 RCW 82.38.090 and 1998 c 176 s 61 are each amended to
read as follows:
(1) It ((shall be)) is unlawful for any person to engage in
business in this state as any of the following unless the person is the
holder of an uncanceled license issued to him or her by the department
authorizing the person to engage in that business:
(a) Special fuel supplier;
(b) Special fuel distributor;
(c) Special fuel exporter;
(d) Special fuel importer;
(e) Special fuel blender;
(f) Dyed special fuel user; ((or))
(g) International fuel tax agreement licensee;
(h) Refiner; or
(i) Crude oil importer.
(2) A person engaged in more than one activity for which a license
is required must have a separate license classification for each
activity, but a special fuel supplier is not required to obtain a
separate license classification for any other activity for which a
license is required.
(3) Special fuel users operating motor vehicles in interstate
commerce having two axles and a gross vehicle weight or registered
gross vehicle weight not exceeding twenty-six thousand pounds are not
required to be licensed. Special fuel users operating motor vehicles
in interstate commerce having two axles and a gross vehicle weight or
registered gross vehicle weight exceeding twenty-six thousand pounds,
or having three or more axles regardless of weight, or a combination of
vehicles, when the combination exceeds twenty-six thousand pounds gross
vehicle weight, must comply with the licensing and reporting
requirements of this chapter. A copy of the license must be carried in
each motor vehicle entering this state from another state or province.
Sec. 20 RCW 82.38.110 and 2002 c 352 s 26 are each amended to
read as follows:
(1) Application for a license issued under this chapter ((shall))
must be made to the department. The application ((shall)) must be
filed upon a form prepared and furnished by the department and
((shall)) must contain such information as the department deems
necessary.
(2) Every application for a special fuel license, other than an
application for a dyed special fuel user or international fuel tax
agreement license, must contain the following information to the extent
it applies to the applicant:
(a) Proof as required by the department ((shall require))
concerning the applicant's identity, including but not limited to his
or her fingerprints or those of the officers of a corporation making
the application;
(b) The applicant's form and place of organization including proof
that the individual, partnership, or corporation is licensed to do
business in this state;
(c) The qualification and business history of the applicant and any
partner, officer, or director;
(d) The applicant's financial condition or history including a bank
reference and whether the applicant or any partner, officer, or
director has ever been adjudged bankrupt or has an unsatisfied judgment
in a federal or state court;
(e) Whether the applicant has been adjudged guilty of a crime that
directly relates to the business for which the license is sought and
the time elapsed since the conviction is less than ten years, or has
suffered a judgment within the preceding five years in a civil action
involving fraud, misrepresentation, or conversion and in the case of a
corporation or partnership, all directors, officers, or partners.
(3) An applicant for a license as a special fuel importer must list
on the application each state, province, or country from which the
applicant intends to import fuel and, if required by the state,
province, or country listed, must be licensed or registered for special
fuel tax purposes in that state, province, or country.
(4) An applicant for a license as a special fuel exporter must list
on the application each state, province, or country to which the
exporter intends to export special fuel received in this state by means
of a transfer outside the bulk transfer-terminal system and, if
required by the state, province, or country listed, must be licensed or
registered for special fuel tax purposes in that state, province, or
country.
(5) An applicant for a license as a special fuel supplier must have
a federal certificate of registry that is issued under the internal
revenue code and authorizes the applicant to enter into federal tax-free transactions on special fuel in the terminal transfer system.
(6) After receipt of an application for a license, the director
((shall)) must conduct an investigation to determine whether the facts
set forth are true. The director ((shall)) must require a fingerprint
record check of the applicant through the Washington state patrol
criminal identification system and the federal bureau of investigation
before issuance of a license. The results of the background
investigation including criminal history information may be released to
authorized department personnel as the director deems necessary. The
department ((shall)) must charge a license holder or license applicant
a fee of fifty dollars for each background investigation conducted.
(7) An applicant who makes a false statement of a material fact on
the application may be prosecuted for false swearing as defined by RCW
9A.72.040.
(8) A special fuel license may not be issued to any person or
continued in force unless such person has furnished bond, as defined in
RCW 82.38.020, in such form as the department may require, to secure
his or her compliance with this chapter, and the payment of any and all
taxes, interest, and penalties due and to become due hereunder. The
requirement of furnishing a bond may be waived: (a) For refiners,
crude oil importers, or special fuel distributors who only deliver
special fuel into the fuel tanks of marine vessels; (b) for dyed
special fuel users; (c) for persons issued licenses under the
international fuel tax agreement; or (d) for licensed special fuel
distributors who, upon determination by the department, have sufficient
resources, assets, other financial instruments, or other means to
adequately make payments on the estimated monthly motor vehicle fuel
tax payments, penalties, and interest arising out of this chapter. The
department ((shall)) must adopt rules to administer this section.
(9) The department may require a licensee to post a bond if the
licensee, after having been licensed, has failed to file timely reports
or has failed to remit taxes due, or when an investigation or audit
indicates problems severe enough that the department, in its
discretion, determines that a bond is required to protect the interests
of the state. The department may also adopt rules prescribing
conditions that, in the department's discretion, require a bond to
protect the interests of the state.
(10) The total amount of the bond or bonds required of any licensee
((shall)) must be equivalent to three times the estimated monthly fuel
tax, determined in such manner as the department may deem proper((:
PROVIDED, That)). However, those licensees having held a special fuel
license for five or more years without having ((said)) the license
suspended or revoked by the department ((shall)) must be permitted to
reduce the amount of their bond to twice the estimated monthly tax
liability((: PROVIDED FURTHER, That)). Moreover, the total amount of
the bond or bonds ((shall)) may never be less than five hundred dollars
nor more than one hundred thousand dollars.
(11) An application for a dyed special fuel user license must be
made to the department. The application must be filed upon a form
prescribed by the department and contain such information as the
department deems necessary.
(12) An application for an international fuel tax agreement license
must be made to the department. The application must be filed upon a
form prescribed by the department and contain such information as the
department may require. The department ((shall)) must charge a fee of
ten dollars per set of International Fuel Tax Agreement decals issued
to each applicant or licensee. The department ((shall)) must transmit
the fee to the state treasurer for deposit in the motor vehicle fund.
Sec. 21 RCW 82.38.180 and 2007 c 515 s 29 are each amended to
read as follows:
(1) Any person who has purchased special fuel on which tax has been
paid may file a claim with the department for a refund of the tax for:
(((1))) (a) Taxes previously paid on special fuel used for purposes
other than for the propulsion of motor vehicles upon the public
highways in this state.
(((2))) (b) Taxes previously paid on special fuel imposed in RCW
82.38.030(7)(j) exported for use outside of this state((. Special fuel
carried from this state in the fuel tank of a motor vehicle is deemed
to be exported from this state)), less any credit taken under section
16 of this act. Special fuel distributed to a federally recognized
Indian tribal reservation located within the state of Washington is not
considered exported outside this state.
(((3))) (c) Tax, penalty, or interest erroneously or illegally
collected or paid.
(((4))) (d) Taxes previously paid on all special fuel which is lost
or destroyed, while the licensee ((shall be)) is the owner thereof,
through fire, lightning, flood, wind storm, or explosion.
(((5))) (e) Taxes previously paid on all special fuel of five
hundred gallons or more which is lost or destroyed while the licensee
((shall be)) is the owner thereof, through leakage or other casualty
except evaporation, shrinkage, or unknown causes.
(((6))) (f) Taxes previously paid on special fuel that is
inadvertently mixed with dyed special fuel.
(2) Recovery for such loss or destruction under either subsection
(((4))) (1)(d), (((5))) (e), or (((6))) (f) of this section must be
susceptible to positive proof thereby enabling the department to
conduct such investigation and require such information as it may deem
necessary. In the event that the department is not satisfied that the
fuel was lost, destroyed, or contaminated as claimed because
information or proof as required hereunder is not sufficient to
substantiate the accuracy of the claim, it may deem such as sufficient
cause to deny all right relating to the refund or credit for the excise
tax paid on special fuel alleged to be lost or destroyed.
(3) No refund or claim for credit ((shall)) may be approved by the
department unless the gallons of special fuel claimed as nontaxable
satisfy the conditions specifically set forth in this section and the
nontaxable event or use occurred during the period covered by the
refund claim. Refunds or claims for credit ((shall)) are not ((be))
allowed for anticipated nontaxable use or events.
NEW SECTION. Sec. 22 A new section is added to chapter 82.36 RCW
to read as follows:
(1) A licensed crude oil importer must report to the department the
amount of crude oil imported into this state from a state within the
United States in a form and manner as prescribed by the department.
The department must calculate a credit equal to two and one-half cents
per gallon of crude oil imported from each state for the following
calendar year. This credit for each state must be reported to all
licensees.
(2) The amount of the credit provided in subsection (1) of this
section may not exceed the tax otherwise due under this chapter for the
tax reporting period.
(3) A credit calculated for a one calendar year may be carried over
to be credited against taxes incurred in the subsequent calendar year.
(4) No refunds may be granted for credits under this section.
(5) A credit under this section must be claimed through the tax
reports required under RCW 82.36.031.
(6) The credit provided in subsection (1) of this section may only
be applied to the tax due for exported fuel to the state within the
United States from which crude oil was imported.
(7) The department must notify licensees when the credit provided
in subsection (1) of this section has been exhausted and no further
credit shall be allowed for that calendar year.
NEW SECTION. Sec. 23 A new section is added to chapter 82.38 RCW
to read as follows:
(1) A licensed crude oil importer must report to the department the
amount of crude oil imported into this state from a state within the
United States in a form and manner as prescribed by the department.
The department must calculate a credit equal to two and one-half cents
per gallon of crude oil imported from each state for the following
calendar year. This credit for each state must be reported to all
licensees.
(2) The amount of the credit provided in subsection (1) of this
section may not exceed the tax otherwise due under this chapter for the
tax reporting period.
(3) A credit calculated for a one calendar year may be carried over
to be credited against taxes incurred in the subsequent calendar year.
(4) No refunds may be granted for credits under this section.
(5) A credit under this section must be claimed through the tax
reports required under RCW 82.38.150.
(6) The credit provided in subsection (1) of this section may only
be applied to the tax due for exported fuel to the state within the
United States from which crude oil was imported.
(7) The department must notify licensees when the credit provided
in subsection (1) of this section has been exhausted and no further
credit is allowed for that calendar year.
NEW SECTION. Sec. 24 A new section is added to chapter 46.68 RCW
to read as follows:
(1) The significant regional transportation projects account is
created in the motor vehicle fund. Money in the account may be spent
only after appropriation. Expenditures from the account must be used
only for projects on the Columbia river crossing between Oregon and
Washington, the north Spokane corridor, the 520 bridge, and to pay the
principal and interest on the bonds authorized for construction or
improvements.
(2) Upon completion of the project, moneys deposited in this
account must only be used to pay the principal and interest on the
bonds authorized, and any funds in the account in excess of the amount
necessary to make the principal and interest payments may be used for
other significant regional transportation projects.
Sec. 25 RCW 43.84.092 and 2009 c 479 s 31, 2009 c 472 s 5, and
2009 c 451 s 8 are each reenacted and amended to read as follows:
(1) All earnings of investments of surplus balances in the state
treasury shall be deposited to the treasury income account, which
account is hereby established in the state treasury.
(2) The treasury income account shall be utilized to pay or receive
funds associated with federal programs as required by the federal cash
management improvement act of 1990. The treasury income account is
subject in all respects to chapter 43.88 RCW, but no appropriation is
required for refunds or allocations of interest earnings required by
the cash management improvement act. Refunds of interest to the
federal treasury required under the cash management improvement act
fall under RCW 43.88.180 and shall not require appropriation. The
office of financial management shall determine the amounts due to or
from the federal government pursuant to the cash management improvement
act. The office of financial management may direct transfers of funds
between accounts as deemed necessary to implement the provisions of the
cash management improvement act, and this subsection. Refunds or
allocations shall occur prior to the distributions of earnings set
forth in subsection (4) of this section.
(3) Except for the provisions of RCW 43.84.160, the treasury income
account may be utilized for the payment of purchased banking services
on behalf of treasury funds including, but not limited to, depository,
safekeeping, and disbursement functions for the state treasury and
affected state agencies. The treasury income account is subject in all
respects to chapter 43.88 RCW, but no appropriation is required for
payments to financial institutions. Payments shall occur prior to
distribution of earnings set forth in subsection (4) of this section.
(4) Monthly, the state treasurer shall distribute the earnings
credited to the treasury income account. The state treasurer shall
credit the general fund with all the earnings credited to the treasury
income account except:
The following accounts and funds shall receive their proportionate
share of earnings based upon each account's and fund's average daily
balance for the period: The aeronautics account, the aircraft search
and rescue account, the budget stabilization account, the capitol
building construction account, the Cedar River channel construction and
operation account, the Central Washington University capital projects
account, the charitable, educational, penal and reformatory
institutions account, the cleanup settlement account, the Columbia
river basin water supply development account, the common school
construction fund, the county arterial preservation account, the county
criminal justice assistance account, the county sales and use tax
equalization account, the data processing building construction
account, the deferred compensation administrative account, the deferred
compensation principal account, the department of licensing services
account, the department of retirement systems expense account, the
developmental disabilities community trust account, the drinking water
assistance account, the drinking water assistance administrative
account, the drinking water assistance repayment account, the Eastern
Washington University capital projects account, the education
construction fund, the education legacy trust account, the election
account, the energy freedom account, the energy recovery act account,
the essential rail assistance account, The Evergreen State College
capital projects account, the federal forest revolving account, the
ferry bond retirement fund, the freight congestion relief account, the
freight mobility investment account, the freight mobility multimodal
account, the grade crossing protective fund, the public health services
account, the health system capacity account, the personal health
services account, the high capacity transportation account, the state
higher education construction account, the higher education
construction account, the highway bond retirement fund, the highway
infrastructure account, the highway safety account, the high occupancy
toll lanes operations account, the industrial insurance premium refund
account, the judges' retirement account, the judicial retirement
administrative account, the judicial retirement principal account, the
local leasehold excise tax account, the local real estate excise tax
account, the local sales and use tax account, the medical aid account,
the mobile home park relocation fund, the motor vehicle fund, the
motorcycle safety education account, the multimodal transportation
account, the municipal criminal justice assistance account, the
municipal sales and use tax equalization account, the natural resources
deposit account, the oyster reserve land account, the pension funding
stabilization account, the perpetual surveillance and maintenance
account, the public employees' retirement system plan 1 account, the
public employees' retirement system combined plan 2 and plan 3 account,
the public facilities construction loan revolving account beginning
July 1, 2004, the public health supplemental account, the public
transportation systems account, the public works assistance account,
the Puget Sound capital construction account, the Puget Sound ferry
operations account, the Puyallup tribal settlement account, the real
estate appraiser commission account, the recreational vehicle account,
the regional mobility grant program account, the resource management
cost account, the rural arterial trust account, the rural Washington
loan fund, the significant regional transportation projects account,
the site closure account, the small city pavement and sidewalk account,
the special category C account, the special wildlife account, the state
employees' insurance account, the state employees' insurance reserve
account, the state investment board expense account, the state
investment board commingled trust fund accounts, the state patrol
highway account, the state route number 520 corridor account, the
supplemental pension account, the Tacoma Narrows toll bridge account,
the teachers' retirement system plan 1 account, the teachers'
retirement system combined plan 2 and plan 3 account, the tobacco
prevention and control account, the tobacco settlement account, the
transportation 2003 account (nickel account), the transportation
equipment fund, the transportation fund, the transportation improvement
account, the transportation improvement board bond retirement account,
the transportation infrastructure account, the transportation
partnership account, the traumatic brain injury account, the tuition
recovery trust fund, the University of Washington bond retirement fund,
the University of Washington building account, the urban arterial trust
account, the volunteer firefighters' and reserve officers' relief and
pension principal fund, the volunteer firefighters' and reserve
officers' administrative fund, the Washington fruit express account,
the Washington judicial retirement system account, the Washington law
enforcement officers' and firefighters' system plan 1 retirement
account, the Washington law enforcement officers' and firefighters'
system plan 2 retirement account, the Washington public safety
employees' plan 2 retirement account, the Washington school employees'
retirement system combined plan 2 and 3 account, the Washington state
health insurance pool account, the Washington state patrol retirement
account, the Washington State University building account, the
Washington State University bond retirement fund, the water pollution
control revolving fund, and the Western Washington University capital
projects account. Earnings derived from investing balances of the
agricultural permanent fund, the normal school permanent fund, the
permanent common school fund, the scientific permanent fund, and the
state university permanent fund shall be allocated to their respective
beneficiary accounts. All earnings to be distributed under this
subsection (4) shall first be reduced by the allocation to the state
treasurer's service fund pursuant to RCW 43.08.190.
(5) In conformance with Article II, section 37 of the state
Constitution, no treasury accounts or funds shall be allocated earnings
without the specific affirmative directive of this section.
Sec. 26 RCW 82.36.045 and 2007 c 515 s 9 are each amended to read
as follows:
(1) If a licensee, or person acting as such, fails, neglects, or
refuses to file a return or files an incomplete or incorrectly
formatted tax report:
(a) For the first occurrence, the licensee, or person acting as
such, must receive a warning letter from the department. The warning
letter must provide instructions for accurate reporting or notify the
licensee or person how to obtain technical assistance from the
department;
(b) For the second occurrence, a penalty of two hundred fifty
dollars is imposed by the department;
(c) For the third occurrence, a penalty of five hundred dollars is
imposed by the department; and
(d) For the fourth occurrence and for each occurrence thereafter,
a penalty of one thousand dollars is imposed by the department.
(2) If the department determines that the tax reported by a
licensee, or person acting as such, is deficient, the department
((shall)) must assess the deficiency on the basis of information
available to it, and ((shall)) must add a penalty of two percent of the
amount of the deficiency.
(((2))) (3) If a licensee, or person acting as such, fails,
neglects, or refuses to file a motor vehicle fuel tax report the
department ((shall)) must, on the basis of information available to it,
determine the tax liability of the licensee or person for the period
during which no report was filed. The department ((shall)) must add
the penalty provided in subsection (((1))) (2) of this section to the
tax. An assessment made by the department under this subsection or
subsection (((1))) (2) of this section is presumed to be correct. In
any case, where the validity of the assessment is questioned, the
burden is on the person who challenges the assessment to establish by
a fair preponderance of evidence that it is erroneous or excessive, as
the case may be.
(((3))) (4) If a licensee or person acting as such files a false or
fraudulent report with intent to evade the tax imposed by this chapter,
the department ((shall)) must add to the amount of deficiency a penalty
equal to twenty-five percent of the deficiency, in addition to the
penalty provided in subsections (((1))) (2) and (((2))) (3) of this
section and all other penalties prescribed by law.
(((4))) (5) Motor vehicle fuel tax, penalties, and interest payable
under this chapter bears interest at the rate of one percent per month,
or fraction thereof, from the first day of the calendar month after the
amount or any portion of it should have been paid until the date of
payment. If a licensee or person acting as such establishes by a fair
preponderance of evidence that the failure to pay the amount of tax due
was attributable to reasonable cause and was not intentional or
willful, the department may waive the penalty. The department may
waive the interest when it determines the cost of processing or
collection of the interest exceeds the amount of interest due.
(((5))) (6) Except in the case of a fraudulent report, neglect or
refusal to make a report, or failure to pay or to pay the proper
amount, the department ((shall)) must assess the deficiency under
subsection (((1))) (2) or (((2))) (3) of this section within five years
from the last day of the succeeding calendar month after the reporting
period for which the amount is proposed to be determined or within five
years after the return is filed, whichever period expires later.
(((6))) (7) Except in the case of violations of filing a false or
fraudulent report, if the department deems mitigation of penalties and
interest to be reasonable and in the best interest of carrying out the
purpose of this chapter, it may mitigate such assessments upon whatever
terms the department deems proper, giving consideration to the degree
and extent of the lack of records and reporting errors. The department
may ascertain the facts regarding recordkeeping and payment penalties
in lieu of more elaborate proceedings under this chapter.
(((7))) (8)(a) A licensee or person acting as such against whom an
assessment is made under subsection (((1))) (2) or (((2))) (3) of this
section may petition for a reassessment within thirty days after
service upon the licensee of notice of the assessment. If the petition
is not filed within the thirty-day period, the amount of the assessment
becomes final at the expiration of that period.
(b) If a petition for reassessment is filed within the thirty-day
period, the department ((shall)) must reconsider the assessment and, if
the petitioner has so requested in its petition, ((shall)) must grant
the petitioner an oral hearing and give the petitioner twenty days'
notice of the time and place of the hearing. The department may
continue the hearing from time to time. The decision of the department
upon a petition for reassessment becomes final thirty days after
service of notice upon the petitioner.
(c) An assessment made by the department becomes due and payable
when it becomes final. If it is not paid to the department when due
and payable, the department ((shall)) must add a penalty of ten percent
of the amount of the tax.
(((8))) (9) In a suit brought to enforce the rights of the state
under this chapter, the assessment showing the amount of taxes,
penalties, interest, and cost unpaid to the state is prima facie
evidence of the facts as shown.
(((9))) (10) A notice of assessment required by this section must
be served personally or by certified or registered mail. If it is
served by mail, service ((shall)) must be made by deposit of the notice
in the United States mail, postage prepaid, addressed to the respondent
at the most current address furnished to the department.
Sec. 27 RCW 82.38.170 and 2002 c 183 s 4 are each amended to read
as follows:
(1) If a licensee, or person acting as such, fails, neglects, or
refuses to file a return or files an incomplete or incorrectly
formatted tax report:
(a) For the first occurrence, the licensee, or person acting as
such, must receive a warning letter from the department. The warning
letter must provide instructions for accurate reporting or notify the
licensee or person how to obtain technical assistance from the
department;
(b) For the second occurrence, a penalty of two hundred fifty
dollars is imposed by the department;
(c) For the third occurrence, a penalty of five hundred dollars is
imposed by the department; and
(d) For the fourth occurrence and for each occurrence thereafter,
a penalty of one thousand dollars is imposed by the department.
(2) If any licensee, or person acting as such, fails to pay any
taxes collected or due the state of Washington within the time
prescribed by RCW 82.38.150 and 82.38.160, the licensee ((shall)) must
pay in addition to such tax a penalty of ten percent of the amount
thereof.
(((2))) (3) If it be determined by the department that the tax
reported by any licensee, or person acting as such, is deficient it may
proceed to assess the deficiency on the basis of information available
to it and there ((shall)) must be added to this deficiency a penalty of
ten percent of the amount of the deficiency.
(((3))) (4) If any licensee, ((whether or not he or she is
licensed)) or person acting as such, fails, neglects, or refuses to
file a special fuel tax report required under this chapter, the
department may, on the basis of information available to it, determine
the tax liability of the licensee for the period during which no report
was filed, and to the tax as thus determined, the department ((shall))
must add the penalty and interest provided in subsection (((2))) (3) of
this section. An assessment made by the department pursuant to this
subsection or to subsection (((2))) (3) of this section ((shall be)) is
presumed to be correct, and in any case where the validity of the
assessment is drawn in question, the burden ((shall be)) is on the
person who challenges the assessment to establish by a fair
preponderance of the evidence that it is erroneous or excessive as the
case may be.
(((4))) (5) If any licensee, or person acting as such, establishes
by a fair preponderance of evidence that his or her failure to file a
report or pay the proper amount of tax within the time prescribed was
due to reasonable cause and was not intentional or willful, the
department may waive the penalty prescribed in subsections (((1), (2),
and (3))) (2), (3), and (4) of this section.
(((5))) (6) If any licensee, or person acting as such, files a
false or fraudulent report with intent to evade the tax imposed by this
chapter, there ((shall be)) is added to the amount of deficiency
determined by the department a penalty equal to twenty-five percent of
the deficiency, in addition to the penalty provided in subsection
(((2))) (3) of this section and all other penalties prescribed by law.
(((6))) (7) Any special fuel tax, penalties, and interest payable
under this chapter ((shall)) bear interest at the rate of one percent
per month, or fraction thereof, from the first day of the calendar
month after the amount or any portion thereof should have been paid
until the date of payment((: PROVIDED, That)). However, the
department may waive the interest when it determines that the cost of
processing the collection of the interest exceeds the amount of
interest due.
(((7))) (8) Except in the case of violations of filing a false or
fraudulent report, if the department deems mitigation of penalties and
interest to be reasonable and in the best interests of carrying out the
purpose of this chapter, it may mitigate such assessments upon whatever
terms the department deems proper, giving consideration to the degree
and extent of the lack of records and reporting errors. The department
may ascertain the facts regarding recordkeeping and payment penalties
in lieu of more elaborate proceedings under this chapter.
(((8))) (9) Except in the case of a fraudulent report or of neglect
or refusal to make a report, every deficiency ((shall)) must be
assessed under subsection (((2))) (3) of this section within five years
from the twenty-fifth day of the next succeeding calendar month
following the reporting period for which the amount is proposed to be
determined or within five years after the return is filed, whichever
period expires the later.
(((9))) (10)(a) Any licensee, or person acting as such, against
whom an assessment is made under the provisions of subsection (((2)))
(3) or (((3))) (4) of this section may petition for a reassessment
thereof within thirty days after service upon the licensee of notice
thereof. If such petition is not filed within such thirty day period,
the amount of the assessment becomes final at the expiration thereof.
(b) If a petition for reassessment is filed within the thirty day
period, the department ((shall)) must reconsider the assessment and, if
the licensee, or person acting as such, has so requested in his or her
petition, ((shall)) must grant ((such)) the licensee, or person acting
as such, an oral hearing and give the licensee, or person acting as
such, ten days' notice of the time and place thereof. The department
may continue the hearing from time to time. The decision of the
department upon a petition for reassessment ((shall)) becomes final
thirty days after service upon the licensee of notice thereof.
(c) Every assessment made by the department ((shall)) becomes due
and payable at the time it becomes final and if not paid to the
department when due and payable, there ((shall be)) is added thereto a
penalty of ten percent of the amount of the tax.
(((10))) (11) Any notice of assessment required by this section
((shall)) must be served personally or by certified or registered mail;
if by mail, service ((shall)) must be made by depositing such notice in
the United States mail, postage prepaid addressed to the licensee, or
person acting as such, at his or her address as the same appears in the
records of the department.
(((11))) (12) Any licensee, or person acting as such, who has had
the licensee's special fuel license revoked ((shall)) must pay a one
hundred dollar penalty prior to the issuance of a new license.
(((12))) (13) Any person who, upon audit or investigation by the
department, is found to have not paid special fuel taxes as required by
this chapter ((shall be)) is subject to cancellation of all vehicle
registrations for vehicles utilizing special fuel as a means of
propulsion. Any unexpired Washington tonnage on the vehicles in
question may be transferred to a purchaser of the vehicles upon
application to the department who ((shall)) must hold such tonnage in
its custody until a sale of the vehicle is made or the tonnage has
expired.
(((13))) (14) Unless the use is exempt from the special fuel tax,
or expressly authorized by the internal revenue code and this chapter,
a person having dyed special fuel in the fuel supply tank of a motor
vehicle that is licensed or required to be licensed is subject to a
civil penalty of ten dollars for each gallon of dyed special fuel
placed into the supply tank of the motor vehicle, or one thousand
dollars, whichever is greater. The civil penalty collected as a result
of this subsection must be deposited in the motor vehicle fund. The
penalties must be collected and administered under this chapter.
(((14))) (15) A person who maintains dyed special fuel in bulk
storage for an intended sale or use in violation of this chapter is
subject to a civil penalty of ten dollars for each gallon of dyed
special fuel, or one thousand dollars, whichever is greater, currently
or previously maintained in bulk storage by the person. The civil
penalty collected as a result of this subsection must be deposited in
the motor vehicle fund. The penalties must be collected and
administered under this chapter.
(((15))) (16) For the purposes of enforcement of this section, the
Washington state patrol or other commercial vehicle safety alliance-certified officers may inspect, collect, and secure samples of special
fuel used in the propulsion of a vehicle operated upon the highways of
this state to detect the presence of dye or other chemical compounds.
(((16))) (17) The Washington state patrol ((shall)) must, by
January 1, 1999, develop and implement procedures for collection,
analysis, and storage of fuel samples collected under this chapter.
(((17))) (18) RCW 43.05.110 does not apply to the civil penalties
imposed under subsection (((13))) (14) of this section.
Sec. 28 RCW 82.38.290 and 1971 ex.s. c 175 s 30 are each amended
to read as follows:
All taxes, interest, and penalties collected under this chapter
((shall)) must be credited and deposited in the same manner as are
motor vehicle fuel taxes collected under RCW 82.36.410, except for
funds received from exported fuel sold less the credit allowed under
section 20 of this act with respect to the fuel. These funds must be
distributed as follows:
(1) Fifty-five percent must be distributed to the Puget Sound
capital construction account, created in RCW 47.60.505, to be used for
the construction and preservation of the Washington state ferry system;
(2) Thirty-five percent must be distributed to the significant
regional transportation projects account created in section 24 of this
act to be used for the construction of the Columbia river crossing;
(3) Five percent must be distributed to the significant regional
transportation projects account created in section 24 of this act to be
used for the construction of the north Spokane corridor; and
(4) Five percent must be distributed to the significant regional
transportation projects account created in section 24 of this act to be
used for the construction of the 520 bridge.
NEW SECTION. Sec. 29 If any provision of this act or its
application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other
persons or circumstances is not affected.
NEW SECTION. Sec. 30 This act takes effect January 1, 2011.